Review 9-22

Question 0

Under the par value method how do you calculate the debited paid in capital account?

Answer 0

Number of share purchased x excess over par at issuance

Question 1

How do you calculate interest income for the creditor on the first interest payment received after a loan restructuring? (Equation)

Answer 1

Interest Income =

[(Principle on Note Rec. After restructuring)
- (valuation allowance on loan impairment)]
X (original face interest rate on note receivable)

Question 2

When a held to maturity security is bought for 198,000, what happens to the $4,000 of accrued interest?

Answer 2

It is subtracted from the amount paid

Question 3

Carrying amount, how do you calculate amortized discount?

Answer 3

Beginning unamortized discount x (time passed/period to maturity)

Question 4

What is reported as separate component of Stockholder’s equity (accumulated other comprehensive income) and amortized over the remaining life of the security?

Answer 4

Unrealized holding gains and losses on securities transferred
To held to maturity from available for sale

Question 5

What is the journal entry to calculate the accrual of the income tax payable

Answer 5

Income tax expense. Xxx
Deferred tax liability. Xxx
Tax liability. Xxx

Question 6

What is the eliminating journal entry for an intercompany sale of equipment, where the parent booked a gain?

Answer 6

Gain on Equipment. Xxx
Acc. Depr. Xxx
Equipment. Xxx

Acc. Depreciation. Xxx
Depreciation exp. Xxx

Question 7

In an elimination entry of gain on equipment, what accounts are restored?

2) how are they recorded?

Answer 7

Equipment and depreciation expense

2) as if the equipment was never sold

Question 8

What is the journal entry for deferring gross profit on intercompany sales when ending inventory remains?

Answer 8

Sales. Xxx
Cost of goods sold Xxx
Ending Inventory. Xxx

Question 9

When $100,000 of bonds payable are purchased by the parent for $91,000, what is the amount recorded for investment in bonds, in the elimination worksheet entry?

Answer 9

Investment in bonds. 100,000

Question 10

In the first quarter the estimated tax on income earned is $10,000. Also $30,000 is estimated for income tax on current values of assets and liabilities and their tax bases.

What amount should be reported between liabilities and net worth as estimated income taxes?

2) what is the total of the amount or amounts that should be reported for income taxes?

Answer 10

$30,000 taxes for gains on assets between fair value and bases

2) $40,000, estimated taxes for the quarter and taxes for gains on assets

Question 11

Is the method used for reporting segment information, the asset liability approach?

Answer 11

No

Question 12

If management judges that an operating segment is reportable in year 1 and is of continuing significance, information about that segment should…

Answer 12

Be reported in year 2 even if it does not meet the requirements
For reportability in year 2

Question 13

An enterprise must report the interest revenue for each reportable segment if this information is…

Answer 13

Normally reviewed by the chief operating decision maker

Question 14

For translation, Inventory that had been purchased evenly throughout the year is…

Answer 14

An asset valued at current rate at year end

Question 15

For translation, Accounts payable for equipment purchased on April first during the year is…

Answer 15

A liability valued at current rate at year end